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Pricing in the English NHS quasi market: a national study of the allocation of financial risk through contracts

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  • Pauline Allen
  • Christina Petsoulas

Abstract

The authors investigated how the formal national provisions for pricing in the National Health Service (which are a form of prospective payment, known as ‘Payment by Results’) are operationalized at local level. Transactions costs theory and existing evidence predict that actual practice often does not comply with contractual rules. A national study of pricing between 2011 and 2015 confirms this and indicates that such payment systems may not be appropriate to address the current financial and organizational challenges facing the NHS. As the NHS struggles radically to reconfigure services, it is necessary to reconsider the appropriateness of a wider range of pricing mechanisms to facilitate moving care out of hospitals.

Suggested Citation

  • Pauline Allen & Christina Petsoulas, 2016. "Pricing in the English NHS quasi market: a national study of the allocation of financial risk through contracts," Public Money & Management, Taylor & Francis Journals, vol. 36(5), pages 341-348, July.
    • Handle: RePEc:taf:pubmmg:v:36:y:2016:i:5:p:341-348
    DOI: 10.1080/09540962.2016.1194080
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    References listed on IDEAS

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    1. Andrew Street & Sawsan AbdulHussain, 2004. "Would Roman Soldiers Fight for the Financial Flows Regime? The Re-issue of Diocletian's Edict in the English NHS," Public Money & Management, Taylor & Francis Journals, vol. 24(5), pages 301-308, October.
    2. Andrew Street, 2004. "Activity Based Funding for Hospitals: English Policy, International Experience," Monograph 000487, Office of Health Economics.
    3. Pauline Allen, 2009. "‘Payment by Results’ in the English NHS: the continuing challenges," Public Money & Management, Taylor & Francis Journals, vol. 29(3), pages 161-166, May.
    4. O'Reilly, Jacqueline & Busse, Reinhard & Häkkinen, Unto & Or, Zeynep & Street, Andrew & Wiley, Miriam, 2012. "Paying for hospital care: the experience with implementing activity-based funding in five European countries," Health Economics, Policy and Law, Cambridge University Press, vol. 7(1), pages 73-101, January.
    5. Petsoulas, Christina & Allen, Pauline & Hughes, David & Vincent-Jones, Peter & Roberts, Jennifer, 2011. "The use of standard contracts in the English National Health Service: A case study analysis," Social Science & Medicine, Elsevier, vol. 73(2), pages 185-192, July.
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    Cited by:

    1. Chandeni S. Gajadien & Peter J. G. Dohmen & Frank Eijkenaar & Frederik T. Schut & Erik M. Raaij & Richard Heijink, 2023. "Financial risk allocation and provider incentives in hospital–insurer contracts in The Netherlands," The European Journal of Health Economics, Springer;Deutsche Gesellschaft für Gesundheitsökonomie (DGGÖ), vol. 24(1), pages 125-138, February.
    2. Bisceglia, Michele & Cellini, Roberto & Siciliani, Luigi & Straume, Odd Rune, 2020. "Optimal dynamic volume-based price regulation," International Journal of Industrial Organization, Elsevier, vol. 73(C).
    3. Hammond, Jonathan & Lorne, Colin & Coleman, Anna & Allen, Pauline & Mays, Nicholas & Dam, Rinita & Mason, Thomas & Checkland, Kath, 2017. "The spatial politics of place and health policy: Exploring Sustainability and Transformation Plans in the English NHS," Social Science & Medicine, Elsevier, vol. 190(C), pages 217-226.

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